Will do! I need to get a better level. Mine isn't up to the task and may very well be inaccurate.
I'll stop by Home Depot and get a better one.
When you get a plumb line up the wall at the lower corner of the soffit, push the level up to the higher ceiling and see if the soffit is going to line up with the new wall without an obvious defect. If so, then all you have to do is beat the corner bead of the lower corner of the soffit, pull the nails and hold the top plate of the new wall directly lined up with the inside of the existing drywall.
This is stick framing with pressure blocks. This is used when you can't readily or easily nail a wall together and stand it up.
Lay your bottom plate perfectly in line with the upper line you pick and screw it down to the floor. You'll have to use an oscillating tool and cut your baseboard back to 1/2" short of the lower plate on both sides.
Once that is in place, cut the top plate and glue, screw, nail it up.
Carefully measure the distance between the top and bottom plates and cut a stud that is about 1/16" too long. Set the lower end on the plate, line it up to the sides and then with a small sledge beat the top of it over against the wall, line it up with glue behind it, straight line it and just put some screw or nails in it to hold it until the glue sets up. Toe nail the top and bottom to the existing framing in the corners.
The pressure blocks have a two fold function. You suck at normal toenailing so don't even try. Do a 16" on center lay out down the wall's bottom plates. Step by step, butt your tape measure into the wall (wall, not new stud) on the left side, read over to the 16" line and make a mark 3/4" back or 15 1/4" and mark that with a small arrow and an X on the right side of the line so it looks like this ^X. Come back with your square when you are done and make a line across the plate through the point on the ^ and the X will tell you which side of the line the stud goes on.
Butt the end of your tape measure into the
stud you nailed up and measure over to the line and cut a block exactly that length and nail it down. Put the first nail in and then smack it over tight against the stud. Put 3-4 nails in it staggered and not lined up so they don't split the block. Use a plumb bob, your fancy new level etc. and transfer the end of that block up to the top plate exactly. Mark the line the same way and now cut a block the exact length. Nail it up the same way. What you have now done is start your lay-out perfectly and you'll do your 16" OC from the next stud you put up which will be the first not against the walls. Cut it the 1/16" too long or slightly less, beat it over against the block and now you can toe tail it in place with 2 16d nails that start about 1 1/2" from the end, about 5/8" in from the edges and go into the top plate at as steep an angle as you can easily nail or drive a screw at. The block holds it on lay out, gives you back at the top and the second part of the function is it gives you backing at the bottom for your baseboard.
After that, you will cut two blocks exactly 14 7/16" long, nail, tighten, finish nailing, and then cut a stud. The 14 7/16" long block will hold it perfectly on a 16" on Center lay-out. When you have all the pressure blocks and studs done, come back and put a single nail or screw from the other side right in the center of each stud.
Sounds much more complicated than it really is.